December 7, 2010

This message is to give thanks for the services of T.J. Barnhart, a real estate agent and an Endorsed Local Provider in Coeur d’Alene Idaho. T.J. is everything that my wife and I hoped and prayed for in a real estate agent. He is professional, dedicated, and knowledgeable. He is also honorable, considerate, and patient. T.J. coached my wife and I through our first home purchase, helping us navigate a market full of short sales and repos while honoring our predetermined purchase price ceiling. We spent roughly three months searching for the right home, visiting from 3 – 10 homes nearly every week. T.J. never stopped encouraging us even through a botched offer on one home. T.J. gave up hunting days without complaint (a big deal in neck of the woods) to walk yet more homes with us. The only time he ever gave us a hint of a limit on his time was when he had plans to take a fatherless little boy to a football party. T.J. is an excellent real estate agent and, more importantly is a good man. We am happy to have met him, happy to purchased our first home with him, and happy to call him a friend.
Thanks, Jason and Stefani Jerman

Hi All, just wanted to give you a quick update on the REO and Short Sale market in North Idaho. Out of 452 total sold properties in the month of MAY 2010; 87 were REO properties or 19%. The average REO sold price was $166,000 and banks settled on offers, on average, 95.37% of list price. There is only a 2 month supply of REO’s on the market compared with a total of 26 month supply of regular inventory. See the two year trend line of REO active inventory, sold inventory, and month of supply below (I found this chart interesting and I am sure you will too):

REO MARKET TREND – CHART – TWO YEAR
http://www.flexmls.com/link.html?ript27vue9e,7,1
If you would like to preview the available REO market inventory, see this link:
http://www.flexmls.com/link.html?ript2ut2sps,7,1

9% of all sales in May were short sales or 44 total short sales closed in May. There are many more short sales on the market now then before, the trend is certainly moving toward a greater level of short sale inventory. The banks seem to still be awash in short sale files and the approval process still takes time. Worst case scenarios are the foreclosure dept’s and loss mitigation dept’s of banks not communicating. Here are the chart and list of available inventory:

SHORT SALE MARKET TRENDS – CHART – TWO YEAR
http://www.flexmls.com/link.html?ript2bdqcky,7,1
Short sale market inventory:
http://www.flexmls.com/link.html?ript35yvvnd,7,1
Thanks, have a great rest of the day – if you’re out and about tonight, I am entering my chili into a cook-off at the Veterans Park at Cherry Hill from 5-8pm. Come on down if your available! As always, if you or someone you know has interest in North Idaho real estate, let me know! Also, if you know of someone that would like this information, forward this to them or give me their email address. I would love to work with you/them. TJB

Hi All, hope everything is going well with you and your family. Sun has finally made it into North Idaho and I am expecting a nice/hot summer. I jumped in Lake CDA this morning – NOTE – it’s still cold. This edition of my NIRE Analysis will focus on:

REAL ESTATE MARKET UPDATE – if you want the charts that I usually send, reply with the request and I will “load you up”
FORECLOSURE UPDATE
SHORT SALE UPDATE
COMMERCIAL MARKET

NORTH IDAHO MARKET UPDATE
Currently there are approx 2844 residential listings in Kootenai County. Current market conditions tell us this is 12.5 months of inventory. 288 units sold last month ($45 Milliion in Volume) up from 177 ($36 Million) one year ago at this time – UP 38% compared April 09’ (in units) –

We have sold 918 units (as reported from MLS) since 1/1/10. The average sold price is 200K. You can expect a house priced around 200K to be on the market 116 days (of course, if it’s priced competitive). If a house is priced above 500K you can expect it to be on the market for 220+ days (upper range HAS to be top 3 in quality and price compared with competition if it’s going to have a chance at selling). The average home will rent for between $900-1150/month.

It will be interesting to see next month’s stats and the effect the expiration of the tax credit has on sales. Further – this came to me from one of my family members regarding the national market…

I went to a real estate conference yesterday. One of the guest speakers was from the Federal Reserve. While I am a little pessimistic about the current market and where it’s going, I was pretty stunned at what this guy had to say (these are his opinions and not that of the Fed). I thought I’d share some of his info:
1. 24% of all homes in the US have negative equity (70% in Vegas)
2. 23% of loans that have been delinquent 12 months – yes, 12 months – have not started foreclosure yet
3. 14.6% of mortgages are NOT current
4. 50% of loan modifications are in re-default after 9 months
5. Hotels have lost 50% of their value in last 24 months – particularly luxury hotels
6. Starting to see consistency in multi-family; however, watch the condo and timeshare market where you buy (eg. timeshares in Orlando can now be rented for $50 per WEEK).
7. Commercial Loans – can’t re-fi overleveraged properties
8. Regional Banks and Community banks own 26% and 47% of their portfolios in commercial loans – banks will continue to be hammered
9. Recovery is 2-4 years away

FORECLOSURE
REO agents are busy this year, and will continue to be for the next 2 years. REO property has accounted for 25% of our sales this year. The average sale price was $153,247 – the price it was listed at when it sells – $160,620. The original list price $171,183. What this tells you – when a bank lists their property and it doesn’t sell in 30 days they drop it 10K until it sells. As a buyer you can expect a 5% discount on the final list price (average bank takes 95.15% of list price). 232 foreclosure properties sold since 1/1/10, for an average of 62 days on the market.

186 Foreclosures on the market now – including pending. See the list below:

SHORT SALES
289 short sales are on the market now, 83 (28%) sold since 1/1/10. Banks are still taking 3+ months to respond, but I have noticed they are responding. Typically they are within 85-90% of market price, however there have been a few occasions where it is less. Here is the link to the short sales:

COMMERCIAL MARKET
333 total commercial listings on the market now. 15 (4.5%) have sold this year (see the list of what has sold here). It’s not looking to good in the commercial realm; however, there are nice commercial development bargains if you’re looking. Contact me for a list if you’re interested.

Thank you for taking the time to review our market conditions and/or look over our listings. If you have further questions or comments or would like to LIST or WRITE OFFERS, please let me know. As always, if you or your family/friends/clients need help with anything real estate in North Idaho, please do not hesitate to get in touch. I am always available and my website is always updated with the latest listings.

There is a lot of information and links enclosed in this email so be sure to save it for future reference.
1. Our market has been doing fairly well in units sold. Feb 09 to Feb 10 we increased almost 30% in sales! Over 2803 total units sold in the last year, 200 in February. Average sold price is hovering around the 200K mark. If you’re curious what 200K will get you, see this link (there are over 160 options, but see 20 here): http://www.flexmls.com/link.html?rflt59f26en,7,1 Interest rates are still very low (5%ish), and the first time homebuyer tax credit is available until June 30th (must have offer accepted by April 30).

The average Days on Market for a listing is 138 days. We have almost 32 months of inventory. We typically have the lowest inventory available in Jan/Feb then start increasing into the summer months, it is still the same, right now we have 6500+ listings, we will be over 7,000+ in no time. The hot price category is below 175K. As always, you can view all housing inventory via map/subdivision/location at my website http://www.LIVECDA.com

2. There are currently 160 bank owned properties on the MLS now, 30 of which are pending (under contract/ 18%). I hear the banks are holding even more but do not want to saturate the market with releasing all. 19% of all SOLD units in the last year were REO properties – 537 SOLD REO in the last year (2803 Total units sold in the Coeur d’Alene Region). Of the 537 sold REO’s, the average was LIST PRICE 181K / SOLD PRICE 170K. Across the board, banks moved off their list price by almost 5%, regular listings, sellers moved 8%.

3. 86 North Idaho waterfront listings sold in the last year. This is across the board, CDA Lake, Hayden Lake, Spokane River, Twin/Spirit and more. Currently, over 120 available. See the list of Waterfront listings here – http://www.flexmls.com/link.html?rflt5krayjc,7,1

4. Despite a rough year in vacant lot/land sales, things are looking up. Many lots available (2700+). 42 sold since Jan 1, 2010, 400 in the last year. Much inventory to choose from, prices are getting reasonable. 5 acre lots for around 50K in the surrounding area. I just listed 3 5+ acre CDA Lakeview lots above Carlin Bay for 75K each. You can view all vacant land inventories here

5. Commercial Market – Lots of information out there about the “dire straights” of the commercial market and the tough time securing financing. In a nutshell, cash availability to businesses that need it to expand, pay bills, hire employees has dried up and it is tough to refinance and establish new credit lines for businesses. The SBA has a program going, but the process is “hairy”. Contact your favorite commercial lender for more information on the lending environment; I am sure they would love to talk to you about it. I hear there could be a potential $500+ Billion in commercial foreclosures/defaults. Locally, we have 282 commercial listings available now in our market (see the listings here http://www.northidahocommercial.com ). 3 of which, are marked as pending. 58 total commercial sales reported to the MLS since 3/1/2009. If you’re curious, you can view a list of commercial business opportunities available here (http://www.flexmls.com/link.html?rfltcghupga,7,1)

If you have specific questions, or if you would like specific niche real estate market info including commercial, please let me know. I have a broad base of listings in each of these categories. If you’re looking for something, I probably have it or have access to it. As always, I am available to assist you, your friends, your co-workers and your family in everything real estate, anytime. Just let me know how I can help. Have a great rest of the week. TJB

This property is a fantastic value nestled above Carlin Bay Marina on Lake Coeur d’Alene. Enjoy everything North Idaho offers (boating, fishing, national forest, hunting, hiking, camping, freedom) at a fraction of the value. This vacant land piece of real estate is priced at only $75,000. See the video below:

While commercial real estate activity has slowed in many parts of the U.S., the city of Post Falls has a substantial amount of activity either planned or in the works.

Meantime, vacancy rates in all commercial sectors in the city are low and appear to be holding steady.

Wal-Mart Stores Inc., is well under way on construction of a $10.3 million, 150,000-square-foot super center just east of the Cabela’s outlet on the Idaho side of the Washington-Idaho state line. That store is scheduled to open by mid-2010. The store will be the second Wal-Mart in the town of 25,000 people.

Near the planned Wal-Mart, Lowe’s Companies Inc., the large, national home-improvement store chain, has obtained land and a building permit from the city of Post Falls. The company plans to break ground on a new store later this year, reportedly around the same time the Wal-Mart opens. The proposed Lowe’s will be the first big-box chain’s first store in Post Falls.

As national chains continue to expand into North Idaho, vacancy rates for rental space are holding steady despite the national economic downturn, and landlords are fetching higher rental rates.

The Spokane-Kootenai Real Estate Research Committee published “The Real Estate Report” in December with vacancy-rate surveys for office, industrial and retail space in communities throughout the Inland Northwest.

The surveys, conducted by Spokane commercial appraisal firm Auble, Jolicoeur & Gentry, showed that Post Falls had the tightest office and industrial markets in North Idaho and a healthy retail market.

The office sector had a vacancy rate of just under 3 percent, essentially the same as it was in the year-earlier survey. The annual rental rate on recently signed leases stood at $15.24 per square foot, a dollar more than the average annual rental rate on all leases. Consequently, landlords are garnering more money for office space than they had in the past.

In the industrial market, Post Falls has a larger amount of square footage than any other community in North Idaho and the smallest vacancy rate. The survey reported that only 1.75 percent of the nearly 2 million square feet of industrial space was vacant. The average annual rental rate on recently signed leases was $7.44 per square foot, more than a dollar higher than average annual rental rate for all industrial space.

In the retail sector, the vacancy rate was higher than it was in the office and industrial sectors, but the rental rates were rising quickly. Post Falls’ retail market had a vacancy rate of just above 12 percent, roughly the same as it has been the past two years. The average annual recent rate is $13 per square foot, more than $1.50 more than the overall annual rental rate.

While competition for space remains strong, land along heavily traveled traffic corridors remains available for development. T.J. Barnhart, of Keller Williams Realty Coeur d’Alene, is marketing a 30-acre parcel along state Highway 41, less than a half-mile north of a major retail center that includes the town’s original Wal-Mart. The land is zoned so that it can be used for a variety of uses—office, industrial, retail or multifamily.

North Idaho city is home to many businesses that relocated from expensive metropolitan areas:

The city of Post Falls, Idaho, one of the fastest-growing cities in the U.S. during the 2000s, has emerged as a haven of sorts for companies that seek a business-friendly environment.

Economic development efforts in recent years have been successful in attracting some of the largest private employers in this 25,000-person city, which is located on the Washington-Idaho border between Spokane, Wash., and Coeur d’Alene, Idaho.

“We just continue to prove over and over again that the state of Idaho is the place to be for business,” says Steve Griffitts, president of the Coeur d’Alene Area Economic Development Corp.

In the past 20-some years, 80 companies have relocated into or expanded into Kootenai County, where Post Falls and Coeur d’Alene are located. Collectively, those companies currently employ more than 5,000 people.

Some of the largest companies to open facilities in Post Falls include U.S. Bank, 400 employees; office furniture maker Kimball International, 400 employees; knife maker Buck Knives, 250 workers; and Ernest Health Inc., which operates North Idaho Advanced Care Hospital, with 150 employees.

Griffitts contends that the vast majority of the companies attracted to North Idaho end up relocating to the region. Initially, many of them are looking to expand, but after learning about the region, many decide to bring their entire operation to the Gem State.

Companies considering relocation—most come from Southern California—typically are attracted to four attributes: a business-friendly political environment, affordable housing, high quality of life, and a skilled, trained workforce.

Idaho routinely ranks near the top in national rankings for business friendly states and toward the bottom in terms of states with burdensome business taxes. In fact, Griffitts says, Idaho ranks 49th on a list of states in terms of high business taxes.

“We have no estate taxes and low property levy rates,” says Griffitts. “We’re a balanced-budget state and a right-to-work state. We have city, county and state leaders that understand the importance of business to a state.”

At the local level, he says, government officials also understand the importance of responding quickly. For example, a few years ago, grocery distributor Sysco Corp. announced plans to open two food-distribution centers in the Northwest, one in Post Falls and one in Western Washington. Griffitts says Sysco held the grand-opening ceremony for the Post Falls facility before it had broken ground on the Western Washington facility, which reportedly was held up by regulatory issues.

One attribute that works to the advantage of economic-development efforts in North Idaho is the availability of land along heavily traveled traffic corridors. For example, a 30-acre parcel along Highway 41, one of North Idaho’s primary north-south routes, is flat and undeveloped. It’s zoned for commercial use and can accommodate retail, office, warehouse or multifamily development.

In addition to business friendliness, Idaho boasts a low cost of living and a high quality of life. The median home price in Kootenai County typically hovers below the $190,000 mark, making homes more affordable in the Coeur d’Alene-Post Falls area than in most metropolitan areas.

Quality-of-life attributes include a close proximity and easy access to lakes and rivers, a variety of nearby recreational activities—skiing, snowboarding, fishing, hunting and a myriad of others—and a vibrant local arts-and-entertainment scene.

The trained, skilled labor force starts with strong public schools in North Idaho that feed into workforce training programs at North Idaho College, in Coeur d’Alene, and the North Idaho College Workforce Training Center, in Post Falls. Last September, Kootenai County had an unemployment rate of 8.7 percent, which is lower than the national average but high enough to indicate that workers are available.

During the recent economic downturn, Griffitts says out-of-state companies have been receptive to the idea of moving their companies to a business-friendly place like Post Falls, because they are looking at a variety of ways to save money and operate more efficiently.

“Once people get out of their comfort zone, they are more open to new information,” Griffitts says. “There is more interest now than ever.”

Congress today has approved the $8,000 first time homebuyer tax credit through April 30, 2010. In addition, if you have owned a home for 5 years, sell then buy another, you are eligible for a $6500 tax credit. See the attached chart for more info and let me know if you have questions! Thanks, TJB

Hope all is well with you and your family.It has been getting pretty cold at nights around Coeur d’Alene, snow is expected soon definitely before Thanksgiving.In this newsletter, I would like to talk about 4 points:1.North Idaho Real Estate Market Conditions, 2.Commercial Property Sales3.$8,000 Tax Credit Extension4.REO and Short Sales

North Idaho Real Estate Market Conditions

Through October 09’ we are sitting with 8373 listings on the market, a 26 month supply at current selling levels.Last month we sold 317 UNITS (consider that is 634 sides to a transaction – we have around 850 real estate agents in our market area).This is actually an 8% increase in sold unit’s year over year.In the coming months we can expect inventory to drop significantly through January – however- I suspect we will see an increase in REO and short sale listings keeping prices low.Our average sold price now is $200,665 and it is 151 days on the market. The $100,000-$200,000 price range is still the hot price points with up to 29% pending ratios in those price categories.In the upper price ranges – $400,000-$2,000,000 there are 8 pendings and a total of 303 listings.I consider this price point Armageddon for residential units priced above 400K (the average price adjustment is $56K!).Please see the attached PDF files, which include: two year trend lines, Total Market Overview, for more information.

There have been a total of 57 commercial units sold (reported through MLS) in the last year.The average price per SQ/FT for commercial sold is $93/FOOT.Average price adjustment before it sell is 29%.Average sold is $447,496. Of course, many factors come into play (i.e. location) when looking at comparable pricing.Commercial money is still hard to come by and with the restructuring and bankruptcy of CIT it may get even tighter.Watch for commercial REO’s.Community banks appear to be holding most of the commercial REO inventory so you might check with your local banks for their commercial REO list.You can see all commercial inventory here: http://www.NorthIdahoCommercial.comPlease see the attached spreadsheet outlining the sold commercial data.

Late last week a bipartisan plan emerged in the Senate that would continue the $8,000 credit for first time purchasers beyond November 30, but would create a new, smaller credit of $6,500 for people who’ve owned and lived in their houses for five consecutive years and now want to buy another as their principal residence.It looks like this is going to go through.It is nice to see they are giving other buyers – like those that have owned their home for 5+ years an incentive to sell and repurchase.When this passes and you would like to list your home for sale and take advantage of this offer – LET ME KNOW!

Right now there are 112 Real Estate Owned (REO) listings on the market.Over 250 sold in the last year.26 sold last month representing about 8.2% of the closed inventory.You can view the current REO inventory here:

There are over 260 short sales on the market.Certain banks seem to be better than others in negotiating the short sales.My last short sale – we had approval in 1.5 months; my short sale before that 7 months!Big differences.To view the first 200 short sales on the market now see: